US economy contracted less than estimated in Q1- government

(FILES) Shipping containers are stacked at the Port of Long Beach on March 4, 2025 in Long Beach, California. (Photo by Frederic J. BROWN / AFP)

WASHINGTON, United States — The US economy contracted less than estimated in the first three months of this year, government data released Thursday showed, revising data that came after an import surge triggered by President Donald Trump’s tariffs.

Gross domestic product in the world’s biggest economy decreased at an annual rate of 0.2 percent in the January to March period, said the US Department of Commerce.

This was slightly less than the initial estimates of a 0.3 percent decline.

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But it was still a sharp departure from 2.4 percent growth in the final quarter of 2024, confirming a first contraction since 2022.

The decline came on the back of a sharp rise in imports as businesses stockpiled goods to try and get ahead of Trump’s sweeping tariffs that targeted most trading partners — especially goods from China.

The shift on Thursday however reflects an upward revision to investment, although this was “partly offset by a downward revision to consumer spending.”

Uptick in imports

Overall, the downturn in first quarter GDP mainly reflected an uptick in imports, slowdown in consumer spending and fall in government spending, the report said Thursday.

These were partially offset by increases in investment and exports.

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Since returning to the White House in January, Trump has imposed wide-ranging tariffs on allies and competitors alike.

His moves included a blanket 10 percent levy on most trading partners and that came into place early April.

A US federal court blocked most of the tariffs late Wednesday, however, throwing Trump’s trade policy into disarray as his administration vowed to appeal.

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